NiceHash CEO Warns Bitcoin’s Biggest Holders May Be Underfunding Network Security
Bitcoin’s growing institutional adoption is raising a critical question: who pays for the mining infrastructure that keeps the network secure?
Saša Čoh, CEO of hashrate marketplace NiceHash, argues that Bitcoin’s largest holders benefit from network security without directly contributing enough to fund it. He also warns that artificial intelligence is competing with Bitcoin miners for electricity, capital, facilities, and computing hardware.
U.S. spot Bitcoin ETFs attracted $6.3 billion in net inflows during Q3 2026, according to SoSoValue data. Their combined net assets reached $109.3 billion in early October, while cumulative net inflows since their January 2024 launch totaled $57.6 billion.
Despite this institutional growth, mining remains concentrated. Čoh points out that two mining pools coordinate roughly half of Bitcoin block production, while four pools account for more than 70%. Mining is essential because it validates transactions and maintains the network’s security.
**AI Is Increasing Pressure on Bitcoin Miners**
Bitcoin’s 2024 halving reduced the block reward to 3.125 BTC, with another reduction expected in 2028. As block rewards decline, miners must increasingly rely on transaction fees.
At the same time, AI companies are competing for the electricity, computing facilities, chips, and investment capital that miners need. Several major publicly traded Bitcoin mining companies have announced plans to expand into AI data centers.
Examples include IREN’s $9.7 billion AI cloud contract with Microsoft, Cipher Mining’s $5.5 billion lease with Amazon Web Services, and Hut 8’s $9.8 billion lease agreement.
Čoh argues that these long-term AI contracts can offer miners more attractive economics than Bitcoin mining. According to Glassnode data cited by Charles Schwab, less efficient miners were spending close to $95,000 to produce one Bitcoin as of May 22.
Bitcoin mining still has one advantage: miners can quickly reduce operations when electricity grids are under pressure. However, this flexibility does not necessarily solve the industry's declining revenue potential.
**A Proposed Market for Bitcoin Security**
Čoh believes Bitcoin security should be treated as a public good that benefits all holders but risks being underfunded because individual investors can rely on others to pay for it.
His proposed solution is to expand open hashrate markets. These allow institutions to purchase computing power without owning mining equipment and direct that hashrate toward different mining activities, potentially including solo block production outside dominant mining pools.
He argues that broader access to hashrate markets could encourage more participants to contribute directly to Bitcoin’s security rather than concentrating ownership of mining companies.
The debate is becoming more important as block rewards decline and AI infrastructure demand grows. The long-term challenge is ensuring that Bitcoin's security remains adequately funded while mining companies face increasingly attractive alternatives.
